Question - On January 1, 2009, McDougald Company issued $8,000,000 of 10-year bonds at a 11% stated interest rate to be paid annually. The following present value factors have been provided to answer the subsequent questions:
|
Time Period
|
Interest
|
PV of $
|
PV of an Annuity
|
|
10
|
9%
|
0.422
|
6.418
|
|
10
|
11%
|
0.352
|
5.889
|
|
10
|
13%
|
0.295
|
5.426
|
Calculate the issuance price if the market rate of interest is 9%.
a. $8,000,000
b. $9,023,840
c. $8,923,840
d. $11,376,000